30 Nov 2013

The world’s leading powers negotiated a
temporary stay on Iran’s nuclear development plans at the beginning of the
week, removing a long-standing risk to oil supplies. In the US, the Conference
Board’s index of leading economic indicators showed growth for the fourth month
in a row in October on the strength of factory orders and housing starts.
Thanksgiving interrupted the trading week in the US and markets there were
pretty flat. In India, however, the Nifty added 181 points to close 3% up at
6176 after trading in a range of 3.2%. FIIs sustained their buying with net
purchases of $88mil and domestic investors sold a net $140ml as daily trading
reached an average of $2.2bn. Volatility was more or les stable, with the India
VIX trading between 19 and 22 before closing a point higher at 21. Market
breadth was strong with advances ahead of declines by 7 to one; there was some
concentration in Nifty trading, happily involving four of our holdings worth
about 15% of market cap contributing a third of the points’ gain for the week.
Confidence in sustained upward momentum was reflected in the futures market
where the three month contract closed at a premium of 2.4% to cash.

23 Nov 2013

The Banking Committee has sent Janet Yellen’s
appointment to the floor of the Senate for a vote early in December while
equity markets moved sideways on an absence of data. The Dow crossed a landmark
by rising above 16,000, but it sparked little enthusiasm for scaling further heights.

The Nifty eased
back by 61 points to close 1% down at 5995 after trading in a range of 4%. Average
daily trading volume slipped back below the $2bn level as fears of FII outflows
took hold. These were not supported by the evidence, however as FIIs continued
with net buying, of $352mil this week, offset by a roughly equal volume of
domestic selling. Volatility stayed around the same level as last week, rising
to 22 early in the week before subsiding back to 20 to close a point higher.
Market breadth was negative with declining stocks outnumbering advances by more
than three to one. Concentration was not a feature this week, however, with
points’ contributions fairly evenly distributed. Index futures closed at a
healthy premium again: 2.3% to cash.

10 Nov 2013

After the Diwali holiday on Monday, Indian
markets joined the world in a soft week. By Friday, the EU had downgraded its GDP growth forecast, the ECB had
cut its base rate and the 'tapering' scare had been reignited in the US by job
figures which suggested the economy had ridden out the shutdown. In the US new jobs are added at
a much faster rate than expected. The Nifty shed 166 points to close 2.6% down
at 6141 after trading in a range of 3.6%. Daily trading volumes moved up to the
twelve month trading average at $2.4bn as FIIs sustained their buying with net
$147mil of purchases.The domestic institutions were the heavier net sellers, of
$313mil. Volatility was stable as the India VIX traded between 18 and 20,
before closing a point higher at 20. Declining stocks outnumbered advances by
four to one as concentration became a feature again. Five stocks representing
just 23% of Nifty market cap accounted for 58% of the points’ loss on the
index. Nifty futures closed at a premium of 2.2% to cash.Just one result this week, Indraprashtha gas
reported revenues ahead by 18.1% but profits down by 6.5% as the cost of
imported LNG ate into margins. As the reporting season draws to a close, the
overall picture looks like positive surprises on revenues came in at 44% with
negative at 23%; at the bottom line, earnings surprises were 44% positive and
37% negative, reflecting broad margin pressure. An analysis of the IT sector
shows the strongest revenue growth for six quarters: 14%, with the leading
names to the fore. In geographic markets, Europe grew by 21% and now represents
28% of the total; the US grew by 12% but is still the major marketplace at over
40%. The market holds near recent highs as
sentiment remains strong. Political commentary is talking up the prospects for
a BJP-led outcome to next May’s election which would be expected to be much
more business-friendly and drive market momentum sharply upwards. The state
elections due around month-end will give an early guide.

About Himalayan Fund NV

The Himalayan Fund N.V. is an investment company with its primary objective to generate long-term capital gains for shareholders by investing in India.

This blog shares with you interesting, weekly news about the Indian economy. It provides insights about the financial situation in India and its market. The team of Himalayan Fund offers knowledge about investment opportunities relating to India.

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